>> we are counting down to the

major market open. the top stories this hour. rebalancing portfolios in the final day of the quarter. markets need a reality check as they stick with their earnings bets. heidi: the mandate should be announced on tuesday. kathleen: nato may label china a systemic challenge as it outlines a new policy guideline. look at what happened on wall street today. bullish hopes were dashed, i are down about .3%. a bit of an uptick. there were up and down all day. almost as many gainers as there

were losers. technology stuff fell. the nasdaq is down about .8%. rebalancing institutions, portfolios, bonds versus stocks. moving things around. maybe people do not believe that the fair market rally is over. another thing that happened is stocks had two bad options. about 3.20%. they note auction was the worst since december -- the note auction was the worst since december. there was a second coupon auction. a lot more supply than demand. investors are uncertain about the direction of the bond market. oil, the rise continues in futures. the g7 is considering that they are going to put a cap on the price of russian crude.

there are oil prices, also they state they will do whatever it takes to support ukraine in the war against russia. there is political unrest in libya and ecuador which will bring some question marks over what is happening in the oil market. want to show you a quick terminal. mike wilson is the bear that called the selloff. a temporary bowl. stocks could rise 8%. it would not be completely out of character with previous bear market rallies. he does see the s&p 500 getting back down to about 4300-4200 -- 3400-3500. if there is a recession, it could fall 23%. this is only a temporary time for buying stocks. haidi: you talk about the

uncertainty when it comes to the sentiment of cross bonds. we are seeing that across a number of asset classes. australian features are looking unchanged. we may see a slight dip at the start of trading. the dollar is not moving much. it has been pushed and pulled by the warring factions of either the recovery in china, but also performing quite badly in a risk off sentiment. kiwi stocks are trading pretty slow at the market -- moment. that has been boosting the yen as well which has been quite interesting. we saw that rise in the previous trading session with the uncertainty in the growth outlook and the prospect of a u.s. recession as well. qe dollar trading just over 63 u.s. when it comes to all the bond

story, along with treasuries recovery in sentiment boosting stocks. you are talking about morgan stanley's call when it comes to the depths of the bear market. analysts are using -- our dear e -- analysts are deer in the headlights. fundamental company analysts are sitting there like deer in the headlights, not knowing what to do with these numbers. we do not get a recalibration. we are familiar with optimistic forecasts from wall street. this year we have seen increases in their forecasts. even with all of the talks of recession and inflation issues. kathleen: you wonder if it is

easier to let your hope overcome your skepticism. say what you want to hear and everybody else wants to see. goldman sachs today also putting out a piece saying that they think the market is underpricing their risk of recession and they are recommending for people do a futures trade the looks at a yield curve flattening. the talk about the fact that markets have priced out as much of the fed rate hikes, they thought there'd be a terminal rate of 3.5% in 2023. the terminal rate i think with the doctor telling you will be about 3.75% in 2023. look at the dot. markets may be expecting rate hikes. listening to risk an actual recession from it. the fed is ready to do whatever it takes. i wonder if goldman sachs will get a good return on this call.

haidi: let us get more analysis. we bring in garth. we have the rebalancing story that culminated overnight. what are investors looking for given the level of uncertainty? >> investors are desperately trying to work out where they can put money and have not too low of a floor. some sort of headroom for the ceiling. most assets look pretty chancy right now. what has gone on in the past week and a half or so highlights that. you have a huge dump in equities. equities tanked. last week, we turn around and we went the other way. extraordinary moves. we are not just talking about

the u.s.. the have the 3% for the u.s. stocks. in australia we had bonds rallying faster than they have done since 2011. truly extraordinary releasing as it takes place in the middle of a cycle. on that basis, it is unprecedented. markets are not sure where they are and that is because however march -- much the fed may try and infuse what they -- insist that they know what they are doing, they are in an extremely uncertain environment. they were saying inflation was transitory and when you see jerome powell saying we will do what it takes, 75 basis points could be on the table. equities are surging and bond yields are dropping back. that underscores the fact that they do not have too much uncertainty going forward and a

people are looking for -- and a lot of people are looking for interest in the shorter end of bonds. they have yields. look at the moose there. kathleen: they are going to make the moves and see what happens. that is why it has to still for the market. they do not know what is going to happen. you see how the notice towards higher yields. what does that mean for bond yields in asia? global bond yields. is the u.s. still a driver or is it driving -- or is it being driven by other forces? >> the u.s. is a strong driver. the one complication is what has been going on with the doj. it is not acting as an anchor for yields outside of japan.

it may even be helping to spur higher yields elsewhere. the liquidity, bonds, in general it has been difficult. you have the past six months or more. what is happening in japan is that the copies investors are being pitched out of the global markets. not just the u.s.. australia's bond yield went negative on a hedge yen basis. other pension funds, life insurance, they have a lot of money, they have been buying a lot up on city australia and the u.s.. they are bringing money back home and that is helping to enhance the effect. haidi: it is a time of uncertainty. that is what we like to hear from you.

that is our chief correspondent for asia garfield reynolds. stay with the bloomberg tv for our live coverage. we will be hearing from the top global central bankers and economists about their outlooks for monetary tightening and inflation concerns. we move on to another big story. g7 leaders are set to instruct ministers to put a price cap on russian oil. jodi schneider joins us. what would -- what form what a price cap take? is it all but done? the story said it would be done by the end of the year. >> the ministers are getting a push from the treasury secretary janet yellen who wants to see -- she wants european counterparts to embrace the concept of having price caps on both gas and oil.

the gas would be announced as soon as tomorrow. it is a way to basically limit revenue that russia is getting from oil and gas and at the same time allowing their to be a stable supply in the world market and not pushing european countries beyond what they feel comfortable with in terms of price. that would destabilize supply and could cause political problems for some of these countries. that is the goal, to relate brush off the revenue. the gas one could be up assistant tomorrow. oil was a bit more complicated. yellen and others are pushing for it. she met with the cypress finance minister. it looks like there was at least respect for the position going forward. haidi: what else is she pushing

for here? >> she is going to cyprus to be a bigger player in this and not allow their to be there -- there to be funding for the war in ukraine. this has been done with the sanctions, sanctions a european countries have gone and enforced. the u.s. has announced sanctions before the start of the war as a threat to russia. it did not stop them from going ahead in ukraine but they are thinking that this has complicated the financial picture.

with european partners, that would be a show of force and that could lead to some changes in how russia is going about opening -- about being able to finance the war in ukraine. kathleen: nato making big changes in their readiness forces. what are they talking about? what is their intent? >> increasing the readiness forces to 500,000 troops. that would be a sevenfold increase which would be substantial. it is a way to deter as much as they can ukraine. to be a show that they will take these threats seriously going forward. and he hoped this would have a deterrent effect as well -- they hoped they would have an deterrent effect. haidi: let us get you over to vonnie quinn with the first line headlines. >> china's central bank has

pledged to maintain an monetary policy to help the country recover. they will prioritize keeping prices stable and maximizing employment as well as supporting small businesses and green projects. the pboc has taken a stand refraining interest rate cuts. extended trading hours for the yuan. it is part of a global influence. they pledged to open to financial markets as the imf lifted the special drawing rights currency basket. limit school supplies only essential services such as health and public transport for two weeks. they foreign-exchange reserve has a record low, they are struggling to pay for medicine and feel there is a complete

collapse of the economy as it worsens. china has hit eight dump truck in missouri. amtrak says the train was traveling from los angeles to chicago instruct the construction vehicle. 250 people were in the train and multiple injuries have been reported. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. kathleen: we speak with carmen to get her thoughts on a possible recession as she prepares to leave her influential role as the or senior vice president and chief economist. -- as the senior vice president and chief economist. investors battle volatility. this is bloomberg. ♪

>> this is the moment that feels it has been 12 years in the making. >> look at technology companies, the large majority will survive it. the question is do they have the strategy to thrive afterwords? >> it is clear right now the market is going to award real companies to build real things and make real earnings. >> we are going to have to be more discerning. >> the place of opportunity today that we are quite focused on continues to be cybersecurity.

>> technology sectors are essential businesses. essential markets. government, perhaps travel. >> the future of work continues to be a place of great opportunity. >> a lot of companies will be absorbed and will disappear. at the end, typically a situation like this creates a lot of new growth. >> there are bright spots, no question we are in for a choppy time. haidi: let us bring our next guest, they say it is unclear if markets have pulled us out of a recession yet but now is the time to look at tech. joining us now is the ceo of pepper international. why is now the right time given how much fear remains? >> i think there are a lot of people who missed the write up in tech. feeling it was overvalued.

technology is down 20% from the beginning of the year. if you have not seen the big tech names, -- haidi: let us try and reconnect with her in a moment. we are going to continue -- get a round up of those stories to get your day going in today's edition of daybreak. terminal subscribers can go to dayb . get the news on the industries that matter to you. much more to come. this is bloomberg. ♪

haidi: i do have you back with us again. why are you up to -- what are you optimistic about technology at the moment? >> we are down over 20% in the big tech names that will succeed whether we have high inflation, or it is better than we think it is going to be. if you are underinvested, this is a good time or wait for the next rate increase. we have eight few days and that would be a good time to jump back in. my favorite is amazon that will

continue to be an outperformer over the next 10-15 years. haidi: where do you feel the market is sitting in terms of these recession rate concerns? we heard from morgan stanley, you have a economists slashing economic growth expectations. -- you have economists slashing economic growth expectations. >> look at the earnings we had today. people are afraid that earnings will be worse than reported but that is not what is happening. companies have been navigating quite cleverly and we will have a fairly decent earnings season. i will give confidence that the corporations know what they are doing and handling the situation better-than-expected. kathleen: we do not know how long it is going to take inflation to get low enough for the fed to stop raising rates. have the markets overpriced fed

hiking and recession starting enough that it will not matter? and will move ahead regardless? >> i think it is fully priced in . a lot of people think that perhaps by the end of the year we could get it down to 6%. not 2%. 2% will happen in this year or next year. think of it on the relative basis. we are going from no interest rates to 2%, 3%, 4%. i think the market is pricing it in and corporations will be able to handle it and the sox will perform well despite the interest rate rise. -- and at the markets will perform well despite the interest rate rise. kathleen: what part of a portfolio should they play? should international investors take note of that too? >> if you want to make money in

a market like this where we do not know what is going to happen. you want to look for sectors where they will do well no matter what is going on with inflation. in the united states was a huge bill passed. massive billions of dollars flowing into infrastructure. we in the world can benefit from this because the money is starting to flow. look at etf's like pave. and for -- infrastructure, measuring sensors, or look at a sector. this war in ukraine will continue and even when it is over, the world is going to be arm itself. kathleen: people are saying diffident players. uncertainty is a good bet. do you recommend that?

should people be more adventurous with their money? >> i think it will be 50-50. we do not know what is going to happen. different cycles have the fear and great indexes swing back and forth. it is impossible to time those things. you do not need to choose. do both. that is my advice. thank you again. kathleen: coming up, we speak with a chief economist, she joins us next. >> what is importw

is for the actions of the brand to proceed and work in a way.

i think we are at the beginning of the honey inflation around by even -- [indiscernible] we need some ways to go forward. kathleen: but i was augustine carstens -- that was agustin carstens. she is getting ready to leave her post and i go back to harvard, i want to talk to you in a minute, about your year. you have been dealing with this more and more over the past two years. i do agree that central banks are doing the right thing and enough to bring down inflation globally? >> i think that certainly, it

got started later than i had hoped. the efforts to bring down inflation and i do think and i have been on cap as persistent for some time. -- on camp persistent for some time. we do have a lot of headwinds. the commodity price surge continues. as bottlenecks are alive and well. it remains to be seen how successful these efforts will be in the near term. kathleen: as we zero in on what you have been zeroed in on at the world bank, the emerging markets and economy, the poorest economies. what about social unrest. we looked at sri lanka and pakistan, laos, who is next? how severe will the push back against higher prices, what do

you see there? >> inflation is a tax and it is a regressive tax that hits at the poorest households. it is not surprising that sri lanka is running close to 40%. we have turkey running above 70% and the countries like egypt are struggling with high food prices. many countries in central asia and eastern europe are also facing serious inflationary pressures. one has to remember that the arab spring had many complex sources. certainly, the food price surge of 2008-2009 and the unrest

associated with that is fresh in our minds. kathleen: what about emerging-market debt? someone looking at that, something investors should stay away from. emerging-market companies -- countries are facing debt problems or problems servicing the debt. that i would assume to continue to be a big concern for their own policy makers policymakers in developed countries? >> the debt problem is if we look back at the drama of august 1982 when new mexico defaulted. we are not at the brahma moment. it list of countries that are facing -- the list of

countries who are facing a debt crisis. china had been a major lender. they scaled back lending. recently. we have the uncertainty that the risk on environment that we have had during the low rate environment may turn to a more permanent or long-lasting risk off. it blankets the emerging markets. all of those things add to the debt risks. i would conclude by saying that with the low income countries, that risk and that crises are not a hypothetical. we are already there. those countries are small and do not grab the headlines of the way that the big emerging markets do. haidi: next month we are coming up to 25 years since the start

of the asian financial crisis. do you feel like the region overall is better placed to cope with the next financial crisis? >> it is not going to be an asian style financial crisis. the asia financial crisis came after a big bonanza, spac growth, surging capital, we are not there. the kinds of problems we are facing on the debt front have to do with stagflation, lack of recovery. this has been exceptionally uneven, different from the recovery of the global financial crisis in which the emerging-market recovered far more quickly than the advanced economies. china was providing an engine of growth. in the aftermath of the global

financial crisis, it is not providing it now. haidi: there is a concern given the lateness of the central bank reaction to inflationary pressures that the inflationary psychology is already set in and the style is into the negative cycle of growth expectation as well. the fear of entrenched stagflation. >> it is very real. we are in the early stages. what makes also inflation persistent is when it is filled -- spilled beyond the goods market, the commodity prices that we have already seen. when wage pressures start to mount. the leaked recoveries are mitigating for the time being some of the wage pressures.

remember in emerging markets, inflation expectations are not nearly anchored as they are in advanced economies. the inflation concerns are going to be i think a big factor for some already. we have practically 90% of emerging markets already with inflation rates above 5% and many more over 10%. kathleen: you started your two years leaving harvard for a couple of years to put academic research and theory into practice. july 2020, middle of the pandemic, we are getting ready for the pandemic and sing the other side. what has that been like?

if you could say a lesson learned, what is it? what are they? >> i think a lesson learned was the very quick response by the multilateral's to deal with the initial onslaught. there is no other word for it of the pandemic. the debt service extension initiative was welcomed also. i am more concerned with the lessons not learned. among those not learned our that at that crises -- is that debt crisis need to be resolved by a meaningful debt destruction. i think that the lesson from past debt crises is without deep debt restructuring what

investors call haircuts, the debt problems are going to be with us for some time and i think that the lack of any debt restructuring, not a single one with more of a year and a half into the common framework that the t20 put forth, is indicative that we are moving very slowly. kathleen: one quick final question. what are you working on next? what is the big issue or issues we are talking to you about the next time between us on this show? >> as you know, i have worked mostly on crises issues. there is no lack of this. we devoted aps to the

disruption of covid. we have the russia and ukraine war. as we know, it has had led to inflation. look for talking to me more about inflation, financial fragility's which continues to be a source. and the to issues we have been talking about. none of those are likely to go away very soon. i think right now, the big hope is the hope of a soft landing. central banks and the major economies will be able to engineer one. i am skeptical. haidi: great to have you with us. we have live coverage from the form on central banking in central portugal this week.

you will be hearing from economist throughout the event about the monetary tightening and procession concerns. goldman sachs and stanley are doing buyback after clearing the stress test. let us bring in sally bakewell. what do we learn and what are the upshots of this? >> we had a stress test and banks cleared them which was to integrate expected. they passed them last year and the tests were harder this year. they were talking about soaring prices and a huizinga -- housing crisis. about doing buyback.

we saw goldman sachs and morgan stanley are at the front of the pack in terms what they would pay in buybacks. one dollar a share by capital requirements which would be interesting because bloomberg intelligence estimates that jp morgan and citigroup may have to have more equity after the federal reserve's test -- stress test. they would invest in the requirements. kathleen: what does this tell us about the bank strategy right now? people who like to hold dividend paying stocks are happy to see any kind of commitment to dividends from the big institutions like this. how does this fit into their overall strategy. >> banks actually the level to

analysts were predicting banks would return to general buybacks was less elevated than what was last year and that was in part because they had so much money during the pandemic that they had this test that they could distribute to shareholders when they got to do it. they have not come out with a kind of buybacks this time. there is a degree of caution by which they are approaching this. the war in ukraine, to be a bit more cautious and have a buffer. has a bit less elevated and on dividends than they were last year when in some cases they doubled them. it also reflects the fact that some of them have already announced big buyback trends. they do not need to return to a huge program again. kathleen: that was sally

bakewell. oil supplies are ending markets. a price cap on russian crude. details ahead. this is bloomberg. ♪

>> you are watching daybreak

australia. g7 leaders are said to instruct ministers to put a price cap on russian gas. the mandate may be announced at the end of the g7 summit on monday. the leaders are expected to make a mechanism to cap prices on russian oil. nato is set to label china a systemic challenge when outlined the new policy guidelines this week. the strategic concepts document highlights a deepening partnership between beijing and russia. it is signed off on by nato leaders in madrid. the u.s. amtrak train has a derail in missouri killing at least three people. it was traveling from los angeles to chicago when they hit a dump truck. 243 people were on board.

a multiple injuries have been reported. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. kathleen: oil futures are expanding in the asian trade after a top u.s. session. this is after a metal rebound, let us get details from bloomberg's su keenan. let us see what it is driving. there are global forces. once you have opec-plus leaders meeting. veteran oil traders saying that you are going to see a lot more what you saw in the last 12 hours. copy trading. -- choppy trading. oil slid back as it is bouncing off a key technical level. there is a lot of crosswinds.

leaders are committed to indefinite support of ukraine and wang a price cap on russian crude at the same time, two oil producers have signaled output cuts to both of their collide with -- cuts because of their political crises. stubbornly strong, to quote one oil analyst. giving the market in a nervous trade. as a big picture despite the rebound we are seeing in west texas intermediate crude, the big picture is it is heading for the first monthly decline this november. what is interesting is we have 10 leaving a rebound, because of optimism about china.

china is the biggest market for metals and the economy has been improving as it eases up on the covid-19 measures. industrial metals are still on track. the biggest quarterly plant since 2008 and -- growth since 2008. they took off in a huge surge due to covid lockdown. that is all over it. the view is that the worst is over. reducing a 21%. nickel, aluminum, copper, all rising. look at the multi-day charts. goldman sachs, a prominent analyst saying that the base metals decline was a function of liquidation due to the market turmoil and not fundamentals. he expects the price pressures to likely linger for a while.

back to you. haidi: be sure to tune in to bloomberg radio to get more from today's newsmakers. get analysis from the daybreak team. you can listen in via the app or bloombergradio.com. much more ahead, this is bloomberg. ♪

haidi: taking a look ahead for asia and australia. another milestone towards gender equality, australia's largest firms increased representation for women on their boards. this trillion operator of taco bell to hit a $.6 billion. -- $8.6 billion. a true owner of a 5.4% stake in the southern former castle. moving onto another big story today. kathleen: stx crypto exchange is a to be explained whether it could acquire robinhood markets. stx is deliberating internally how to buy the app-based brokerage which has been in the news.

katie, great to have you here in new york city. you usually reporting on a story that you broke news today, you had to cover it. update as quickly. robinhood is the memestocks, a troubled industry. >> stx is explained whether they could buy robinhood. there is interest there. they bought more than 7% stake in the company through want of a -- through a vehicle. he could be interested through stx were in some other capacity buying robinhood which has seen its share of -- which has seen its shares go down. there is some synergy there. stx was valued at 32.5 billion this year. robinhood is now trading under $8 billion.

i think crypto has gone down significantly since stx announced the valuation this year. it is hard to say if it would be worth that much. he has not sure if he can buy it because the founders own a majority stake in the company. they have to agree to the deal. haidi: it is a tantalizing prospect. two businesses that have really soared to prominence and have come back down to earth. >> robinhood has had some struggles beyond the stock market being down. in particular, tech stocks. and also for crypto, even before all of that, they had some controversies last year with gamestop which really kind of fashion after they made it difficult to sell gamestop

during the last year, they said it will not of their fan base. they had a triple way to be there that is brought down their stock. i think that some of these companies are not trading well. it will be takeover targets. company might stx is sitting on $2 billion of capital that they have raised. they have cash to be able to buy it. haidi: but is it for daybreak australia. daybreak asia is next. this is bloomberg. ♪

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